Is it too late for Over-the-Rhine to be a Mixed-Income Neighborhood?

Jonathan Diskin is a professor of economics at Earlham College. Thomas A. Dutton is director of the Miami University Center for Community Engagement in Over-the-Rhine. James C. Fraser is an associate professor of human and organizational development at Vanderbilt University.

The dramatic transformation of lower Over-the-Rhine is widely hailed as an “urban renaissance.” But for whom, precisely?

As Xavier’s Community Building Institute’s recent housing study shows, the renaissance comes at a loss of roughly 75 percent of housing affordable to the very poor. That’s alarming.

Mayor John Cranley, who once opposed allowing public funds for new low-income housing in OTR, recently proposed new spending for affordable housing, declaring in a June 1 CityBeat article that new development “should not come at the expense of the people who have lived here a long time.” While we are heartened the city recognizes that OTR has reached – or passed – a tipping point, clearly we need a greater focus on housing affordability if we are to have, in the mayor’s words, “a healthy community that is mixed income.”

If the model of development below Liberty Street is reproduced throughout all of OTR, the neighborhood will be an enclave for more professional, whiter, and wealthier residents; an end game that pushes the poor from valuable areas to those with little commercial value or amenities, reproducing the very isolation that was so denounced by OTR development boosters, including the mayor.

If mixed-income development is to be worthy of its name, it must secure the tenure of people who live below the reach of the market. Letting the market run is no option as housing markets segregate by income. Two basic points must be at the forefront of policy deliberation to insure that more of the poor are not displaced.

First, demonstrate the same level of commitment to secure poor households as the city did with market-rate development. Small intermittent gestures will not suffice because the market is roaring in OTR and rents and property values are rising rapidly. We need to employ now all the tools that nationwide experts agree work. These can include:

These policies are hardly radical; many U.S. cities use at least one. But none of these exist in Cincinnati, perhaps due to a lack of real interest in housing affordability in OTR. Inclusivity will not materialize unless concerted action is taken – and soon.

Second, fund affordable housing through a “shared equity” model. Make no mistake, OTR’s raging market has been fostered with a huge infusion of public money, from beautification to park renovations to commercial building renovation. Our analysis, based on 3CDC’s public disclosures about its financing sources, shows that new units of housing, including condos and apartments, benefited from an average of about $200,000 worth of public and philanthropic money.

Given this public/private arrangement, we can ask those who are reaping private gains from these public expenditures to cover some of the costs of more inclusive housing. The mayor’s call to extend the mechanism created to capture some of this new property value for the streetcar, the Voluntary Tax Incentive Contribution Agreement (VTICA), is a good start in this direction. This mechanism asks developers to contribute some portion of the property taxes that the city agrees to abate for 15 years, to a fund dedicated to some clear purpose. A portion of this money could fund low-income housing and support businesses that serve residents of modest means. Developers are getting sweet deals as the value of their property increases while hundreds of millions in public monies is pumped into OTR. We propose extending this principle of “value recapture” such that those who have invested in OTR property would pay a small tax to support inclusion if they sell and reap a huge capital gain.

In a May 26 Enquirer article, Cranley says, “We have room to grow a city with everyone. That is when it really becomes a city.” Effort is needed now to ensure housing affordability in OTR and elsewhere. Anything less will simply relocate the very concentrated poverty that he and others claim to address.

[This op-ed first appeared in the Enquirer under title Protect Affordable Housing in OTR.]

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